Czech salaries grow, but still lag behind EU incomes
Just a day after Czechs learned that they spent more by a third in this year's Christmas shopping than they did last year, here is another news item to confirm that the nation's average standard of living is growing. The stress is on the word average, as Olga Szantova explains.
The big news is that the average Czech salary has been increasing and this year reached 16 000 crowns a month, that's nearly 1000 German marks. Now, if that is the average salary, many Czechs have obviously been earning much more, because two thirds of the working population do not come anywhere near to making 16 000 a month. But even those whose pay slips do have that figure on it are still only earning about one fifth of what the average German brings home. Jan Finferle of the Department for the Coordination of the Czech Republic's Relations with the European Union says there is a very good reason for those huge differences in salaries.
"I would like to stress that the main reason why there is still a different level of wages in the Czech Republic and in the current member states is the fact that there still exists a different level of productivity of labor. And the faster the Czech Republic will bring near its productivity of labor to the level of the EU current member states, the sooner it will bring near its level of wages to the average of the EU countries."
In other words the only means of increasing salaries is increasing the productivity of labor and Mr. Finferle stresses that foreign investors are playing an important role in this process, because their requirements are often much higher than Czech traditional demands.
"During the last two or three years the Czech Republic ranked among the first candidate countries as regards the level of foreign investment so it means that the Czech Republic has been placed on the first place as regards the level of foreign investments. That means we very much appreciate that there is such a big interest on the part of the foreign investors in investing in the Czech Republic and of course this foreign investment contributes to the increasing of the productivity of labor in the Czech Republic."
So, it seems, salaries will catch up with those in EU countries only gradually after the Czech Republic has joined the European Union. Meanwhile most prices are already at Western levels.
"I wouldn't say that there is still such a big difference in the level of prices in the Czech Republic and in the current EU member states, because there are certain groups of products where the level of prices has been quite comparable in the Czech Republic and in the current EU member states. It's true that there are still differences mainly in food products. It means that the level of our food products has been lower than the average in the EU countries. But there are certain groups of products or some services where the prices in the Czech Republic are very near of practically at the same level or perhaps a bit higher than the average in the EU countries."
True, at this point food is much cheaper in the Czech Republic than it is in the European Union, and since food is a major part of people's budget, on average, again on average, Czechs' shopping bills are smaller than those paid in European Union countries which, added, divided and multiplied leads to this result: the Czech standard of living is only, if only is the word, only three times lower than in Germany, not five times lower as the comparison of salaries only would show.
So, how will the Czech Republic's accession to the European Union change the situation? Mr.Finferle is optimistic.
"It should be just a mid-term period after our accession that both the salaries and the prices will be at the same level in the Czech Republic and in the remaining EU member countries."
Meanwhile Czechs will just have to work harder if they want a standard of living equal to that of their Western counterparts. And, in fact, many of them are, especially those with higher incomes. Sociologists say that one in three Czechs spends at least a couple of hours of his weekend at work, and two thirds of Czech managers work over 45 hours a week, much more than in other European countries. And holidays abroad and other luxuries? Many people take on second, part time jobs, in order to afford them. But, regardless of the cost, the standard of living is growing. As a recent university graduate told Radio Prague
"It's still bad but it's better than ten years ago."